Finding Text
Internal Control over Compliance and Compliance with Activities Allowed or Unallowed and Allowable Costs and Cost Principles Identification of the Federal Programs: As this is an indirect cost allocation finding, all Population Services International (PSI) awards on the SEFA are impacted. See Schedule of Findings and Questioned Costs for table. Criteria or Specific Requirement: In accordance with §200.303 Internal Controls, a non-federal entity must (a) establish and maintain effective internal control over the federal award that provides reasonable assurance that the non-federal entity is managing the federal award in compliance with federal statutes, regulations, and the terms and conditions of the federal award. Additionally, §200.475(e) Travel costs, states that airfare costs in excess of the basic least expensive unrestricted accommodations class offered by commercial airlines are unallowable except when such accommodations would: (i) require circuitous routing; (ii) require travel during unreasonable hours; (iii) excessively prolong travel; (iv) result in additional costs that would offset the transportation savings; or (v) offer accommodations not reasonably adequate for the traveler's medical needs. The recipient or subrecipient must justify and document these conditions on a case-by-case basis for the use of first-class or business-class airfare to be allowable in such cases. Condition: HealthXP has documented policies and internal controls over allowability of expenditures incurred. However, as identified below, the review and approval process did not operate effectively. During our testing of the indirect cost pool, we identified one unallowable unapproved expense out of 25 samples tested. The exception involved a business-class airfare totaling $5,930, which does not comply with 2 CFR §200.475, Travel costs. Questioned Costs: Known questioned costs associated with the business class airfare totaled $5,930. Context: This is a condition identified per review of HealthXP’s compliance with allowability and allocability provisions of the Uniform Guidance. The prevalence of this finding is detailed in the condition section above. Samples were selected using a non-statistical method. Cause: HealthXP has documented expenditure policies and procedures regarding the review and approval of expenditures incurred. However, as identified above, the review and approval process for the sample identified above did not operate effectively. Effect: Because this unallowable amount was included in the indirect cost pool allocated across all federal programs, this noncompliance affects all PSI federal awards listed on HealthXP’s Schedule of Expenditures of Federal Awards for the year ended December 31, 2025. Repeat Finding: This is not a repeat finding. Recommendation: We recommend HealthXP adhere to documented policies and procedures regarding review and approval of expenditures. Views of Responsible Officials: HealthXP management agrees with the finding and recommendations set forth within and will provide additional training to staff members to ensure compliance with established policies and procedures. Refer to management’s corrective action plan for additional information.